RIP: Steve Jobs, Prince of Peace

Steven Horwitz

Unlike many, I am not an Apple-phile. I honestly don't get the emotional relationship people have with their products. HOWEVER... there is absolutely no doubt that Steve Jobs is a symbol of all that is right with markets and capitalism. This is a man who became very, very rich by making many people's lives (including my own) very much better. He was a master at creating value and persuading people that they wanted things they didn't know they wanted. He should be part of the pantheon of human heroes.

Unlike the political and military heroes of war we too often celebrate, Jobs is a hero of peace. He made his money through persuasion not at the point of a gun, and through mutual benefit not oppression and exploitation. Those of us who really desire a peaceful society should not celebrate those who were victorious in war, but those who created value through peaceful, voluntary, mutually beneficial exchange - exchanges that happen billions of times every single day. And we should do it no matter whether what was exchanged was electronic bits of magic, food for us to eat, or financial instruments that improve the movement of capital. They all create value and improve our lives, and all of their benefits are deserved.

Thanks for everything Steve and thanks for making the world a better place one peaceful, cooperative exchange at a time.

That's the beauty Dan: in the market, I don't need to buy his products to see how much they have meant to my friends like you (and for the record,I do own an iPod and Jody has an iPhone). I can write that without having bought his product. It's not clear that your analogy with the world of ideas holds.

This year marks the 100th anniversary of the publication of Joseph Schumpeter's "The Theory of Economic Development," in which he highlighted the unique and society-changing role of the entrepreneur as innovator -- the market mover and changer who introduces a new product, a new technology, a new way of organizing the affairs of business and the ways of going about life.

May I suggest that Steve Jobs was a real world "ideal type" of Schumpeter's innovating entrepreneur who transforms the existing order of things through what Schumpeter later called the process of "creative destruction."

Steve Jobs demonstrated the uniqueness of the individual, the importance of the individual, and the primacy of the mind in all things. He was an outstanding example of Julian Simon's point that the "ultimate resource" is . . . man.

And as our Steve points out, above -- Steve Jobs did all those creative transformations of so much of our everyday life through the peaceful processes of the market.

His wealth, which clearly was not the ultimate motive for his driven creative work (he more than once said it was the love of the doing, the challenge of pursuing excellence, and never being satisfied with past achievements -- with the past as merely prologue to the next chosen task), was acquired through the voluntary transactors of multitudes of hundreds of millions of people in virtually every part of the globe.

And as Schumpeter also argued, the creative innovator is the inspiration and stimulus for others to then imitate the innovation and the result, over time, in all rivals and enterprises integrating the new idea into every facet of social and economic life.

Schumpeter, in addition, said the vibrancy and significance of capitalist competition can only be understood and judged by evaluating it as a process over years and decades, and not as a "frozen frame" (like our textbook diagrams of "perfect competition" or "monopoly") taken out of the on-going "motion picture" of the never-ending market process.

Look over the more than three decades during which Steve Jobs worked as a Schumpeterian innovator in the market system, and you see how competition really works, and how the initial new-product "monopolist" sets in motion the changes over time that makes the market even more competitive than it had been before.

The world is a better place due to Steve Jobs, and to the fortunate circumstance that our society has remained sufficiently competitively open that an individual of his creative ability and genius could -- as if by an invisible hand -- improve so many lives while he pursued his own self-interest.

Count me as one who appreciates the neat things created at Apple, but if Jobs is the brilliance behind the company, Wozniak is its heart and soul. My guess is that without Wozniak, this company probably never would have happened, at least not the way we know it.

You stated that Jobs operated "through mutual benefit not oppression and exploitation." A lot that I've read about him and Apple and Pixar is that Jobs was basically an asshole who treated people like shit. Ed Catmull and a few of the other original founders of what would become Pixar described their having to take on revolving roles as president of Pixar because the stress of dealing with Jobs' anger and the way he treated them was too stressful and difficult.

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Seeing a chance to make some more money so he could head back for the October harvest at the apple orchard commune All-One Farm, in Oregon, [Jobs] put his name in the hat for the bid on the contract. He was eventually awarded the contract [to modify the circuit board for Atari's Breakout game] and [Atari engineer] Alan [Alcom] gave him the specs for Breakout.

Maybe they had an inkling that he'd actually work on Breakout with Wozniak, who they already knew from his low chip PONG. As Allan later said "Jobs never did a lick of engineering in his life. He had me snowed. It took years before I figured out that he was getting Woz to 'come in the back door' and do all the work while he got the credit."2

Regardless, Jobs did approach Wozniak with the job and two of his own requirements which are now legendary. Woz would get half of the fee which was claimed at $700 and no mention of a bonus. In fact, the way Jobs described it, if they could design it in under 50 chips, they'd get 700 bucks; and if it was under 40 chips, they'd get $1000. Likewise the second catch - it had to be done in four days. As Wozniak later found out, "Atari didn't put us on a time schedule; Steve did. I had to do it in four days because Steve had to catch an airplane to Oregon. I was the designer-the engineer-and Steve was a breadboarder and test technician."2

Wozniak had designed it by hand, under the continuing pressure of Jobs to get it done quick (though he wouldn't say why). Doing the designs during the day while at HP, at night Jobs would wirewrap the design under his guidance. Wozniak also spent much of his time those four nights playing Gran Trak 10, the game monopolizing most of the manufacturing assembly line at the time. Towards the end of the 4 day non-stop marathon, Woz's Breakout prototype was almost finished. Wozniak was able to get the number of TTL's down to a startling 42 chips, but still had a few problems he wasn't happy with. When all was said in done, the Breakout prototype that was submitted by Jobs to Allan and Nolan had 46 chips and left everyone very impressed. They paid Jobs in cash, the $700 plus the bonus - which turned out to be a total of $5,000! Jobs turned around and paid an unknowing Wozniak the original $350 they had agreed upon.

Both Jobs and Wozniak got mono from the 4 day event, but Jobs was off to Oregon right away with his $350 plus sizeable bonus to support him over the next few months.
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I've seen this type of behavior too often in my life - someone does the work while someone else grabs the attention and takes all the credit, essentially marginalizing the true genius and creator. Is it voluntary? I'd certainly regard it as exploitation of others.

The only thing I haven't read from anyone yet is that he unjustly destroyed the careers of those he perpetually bullied. It may never have happened, but we'll see what current and former workers and executives reveal in the coming years.

Everyone who knows me knows I do not get excited about every new "computer" development. In fact, I hate cell phones of every kind.

Nevertheless, all I could think about when I heard the news is how wonderful the market is. A person can express his creativity, without compromising his self-interest, amd yet benefit so many millions of people. As Mises said, the market overcomes the altruism-egoism distinction.

There is an important moral lesson here. Sometimes you can benefit other people more by benefiting yourself than by trying to do it directly. The ignorant idea that doing good requires "altruism" is so taken for granted by some people that they do not see it going on countless times in everyday life. Because of the market we are all "saints."

He will definitely be missed. Let's hope Apple can continue to do good without him.

@Ben The workers in China definitely "owe" him the most. He gave us iPads and mp3 players. He gave _them_ a way to feed their families and join the extended order of human cooperation. We should all be so fortunate.

None of them had to work for them. None of them were forced. They all chose to stick with him. It was all voluntary exchange -- they all realized they were better off being with him than without, or else they would have done other than they did. Look at their actions, not their whiny complaints.

Nothing was reported about anybody whining. The point was that, contrary to the accolades Jobs is receiving for engaging in honest and mutually beneficial exchanges, he a) was quite a bit more oppressive and engaging in involuntary theft - or possibly co-opting - of others ideas, therefore attributing to himself recognition that rightfully belonged to others; and b) although certainly a strong force behind the success of Apple, without Wozniak Apple probably never would have come about.

I have no sour apples about Jobs; in fact, I own and use a lot of Apple products. I also attribute to Jobs the great turnaround of Apple since he returned in 1997. And he certainly deserves great recognition and credit for taking great risks in buying Pixar and funding it through many years of losses (big losses) until it succeeded. But there was and still is a lot more behind the success of Apple besides Steve Jobs. In fact, without Wozniak Apple would not be around today, at least not in the same format and with the same product lineup that currently exists.

That's like complaining that we aren't giving the culture and society he lived in enough credit for creating the social situation in which he could be successful. It's true, but entirely beside the point in regards to why Jobs is worth praising. I think Bill Gates is worth praising for similar reasons, even if he does hold some pretty idiotic ideas about the economy and the government's role in it, and there's little question that some questionable tactics have been used by him. Still, when he dies, he will receive much well-deserved praise from me and others. Why? Because he made almost everyone on the planet's life better. It's what you have done on balance that matters.

That is most definitely a good thing. Nobody knew they wanted a car until there were cars Nobody knew they wanted to fly on planes until there were planes. Nobody knew they wanted air conditioning until there was air conditioning (people sensibly live in the north and stayed out of the south, for the most part). There would be no economy at all unless people were making products nobody knew they wanted. Economic growth would never exist without such products. Essentially, Say's Law was exemplified by Jobs. What he did is exactly what the economy is all about.

Troy -
re: "None of them had to work for them. None of them were forced."

Wow - no libertarianism even makes complaining about the boss off limits?

Can't we still have that, if for no other reason than that it's cathartic??

Also - that reading of Say's Law is about 90% poetic license and 10% the exact same strawman that Keynes gave us that you all complain about! Which by my calculation leaves 0% for actual Say's Law (that's assuming there's no multiplier involved here).

Providing things people didn't know they wanted is EXACTLY what markets often do and no defender of the market should apologize for it. (It's not about Say's Law - DK is correct.) That's exactly what entrepreneurial discovery is, it seems to me. It's not a matter of "manipulating" our wants, but presenting us with something that we had never before considered as being something useful. Great entrepreneurs know us better than we know ourselves.

Roger: The other use of that title phrase didn't hit me til after I published the post (perhaps not surprisingly given my own background), but I decided to leave it as it is a bit of a tweak against those who really do view him "that way."

Steve & Troy - I take your point but I suppose I was thinking of the sort of people buy the latest Apple product because it's shiny, new and has Apple written on it rather than because they actually need it. The way Apple suggests you should buy its products because they are hip and trendy rather than because they are actually useful exemplifies this.

One of the findings by Rogers and Shoemaker on innovations was that the many effective innovations came from a partnership between a "geek" and some other person who looked after the 'front office" and the business side of things.

He may not have made his money at the point of a gun, but let's not forget that he made it on the backs of child labor and sweatshops in China. I admire Steve Jobs, and I don't think he was directly responsible for it, but there WAS "oppression and exploitation" involved.

Steve Jobs was certainly a visionary and a product design genius. But saying that he should be part of the "pantheon of human heros" is just too much. Heros are firemen and police. Heros are people like Gandhi and Martin Luther King.

Richard -
Obviously I agree with Steve that preferences aren't always known to us simply because we're ignorant of a lot of wondrous possibilities that haven't emerged yet, but I do think you have a point insofar as the hyperbolic discounting associated with fads is real. Anyone that's pro-market also shouldn't be afraid to note that sometimes we buy things we go on to regret buying. Don't we all have some experience with this? The point is - this doesn't invalidate entrepreneurial discovery, nor is it an attack on markets (as a lot of people like to frame these observations to score rhetorical points). It's simply how markets seem to work in the real world.

I didn't say complaining about the boss was off limits. I said that those complaints are completely irrelevant to what he gave the world. Those complaints are completely irrelevant in the context of the praise being given to him here.

I should have said "Keynes' gross mischaracterization of Say's Law, which is still more accurate to reality than Keynes' refutation of it" -- is that better?

Richard -- we didn't need the first MacIntosh computer. We didn't need the first phone. We didn't need the first record player. We don't need the car, the plane, electricity, the steam engine, or the wheel. All we need is minimal nutrition and water. The rest (including clean water) are luxuries. But these things all make our lives better.

Troy - I need a computer so I have bought one. I do not however need an iPad so I haven't bought one. There will however be people who buy one because it is "fasionable" then find they have no use for it.

I don't have a problem with people spending money on fashion, whether it's a pair of shoes, a hat, a car, or an iPad. They may have little use for an iPad as a technical gadget, but they do have a use for it as a fashion symbol. Just because it is a use that you might not share or approve of ... so what?

Richard, nobody needs a computer. We only want them. You "need" a computer because that is the best way to do what you want to do. You need food; you need water. That is all. And what business is it of yours why anyone buys anything? It's fashionable to do your writing on a computer, to engage in online buying and selling, etc. That is all.

"Unlike the political and military heroes of war we too often celebrate, Jobs is a hero of peace. He made his money through persuasion not at the point of a gun, and through mutual benefit not oppression and exploitation. Those of us who really desire a peaceful society should not celebrate those who were victorious in war, but those who created value through peaceful, voluntary, mutually beneficial exchange - exchanges that happen billions of times every single day. ...

Thanks for everything Steve and thanks for making the world a better place one peaceful, cooperative exchange at a time."

Do PATENTS involve SOLELY voluntary exchanges, or also the point of a gun?

Tokyo, Apple and other companies like Microsoft use patent, as well as copyright, to charge higher prices than they otherwise could, and to restrict competition. So it is doubtlessly true that some portion of profits of Apple and Microsoft are greater than they would be in a free market (on the other hand, in a free market, there would be no taxes and economic productivity would be thru the roof, so firms would also be more profitable, so who knows the net).

I've argued with my fellow left-libertarians about this. They seem to think that basically any corporation--surely the Fortune 500--are all basically "part of the state," as a state university or the post office is. I think this is a completely unsupportable view. Basically Apple was a private company in an unfree world; its own actions were distorted by the effect of IP law and other state regulations, but it succeeded despite them and I don't think for one second Apple could not have been successful sans patent and copyright law. Sure, they could not have sued Franklin Ace in 1984 (Franklin's Apple II+ clone was my first computer), or other clones. It would be harder to keep competitors from chipping away at a "closed" system as Apple relies on now. But their main market was hardware; just as you can sell a Mercedes at a premium because it is well designed, so Apple could still do great in its business, I believe. I.e., its profits are not dependent on state favoritism and IP law.

"Mocking them is more fashionable than being them. Well played good sir."

Not that I've seen, except for the short-lived i-Bores column in Private Eye.

"And what business is it of yours why anyone buys anything?"

I am allowed to have an opinion on anything I want. And if I find it odd that people buy stuff just because other people to do or because they're insecure I reserve the right to highlight this fact. Note that I am not calling for government intervention.

"It's fashionable to do your writing on a computer, to engage in online buying and selling, etc. That is all."

I don't do it because it's fashionable, I do it because it's convenient.